Mr Timms, who is also Labour’s Shadow Employment Minister, said the move would reduce the welfare bill more effectively than the pilot started by the Coalition on Monday in four London boroughs - Croydon, Bromley, Haringey, and Enfield - before it is rolled out nationally in July.

Under the changes, benefits for couples and single parents will be capped at £500 per week - or £26,000 a year - while the limit for single people will be £350.

Mr Timms said: “For all the Tory rhetoric, the true picture of this Government is one of economic failure.

“They are having to borrow £245bn more than they planned, not to pay for the investment needed to grow our economy, but to pay for more welfare spending caused by high unemployment.

“We desperately need a change of direction. Labour has called for a compulsory jobs guarantee to give the long-term unemployed a job, which they will have to take up or lose their benefits.”

Labour leader Ed Miliband supported Mr Timms’ comments but added that the party would be in favour of a benefit cap if it was adjusted regionally to take into account local housing costs.

Mr Timms will also be hosting a Jobs and Apprenticeships Fair with West Ham MP Lyn Brown at West Ham United from 10am to 4pm on Thursday May 2 at West Ham United Football Club.

Do you think jobseekers should lose their benefits if they refuse a job? Write to us at letters@newhamrecorder.co.uk, tweet us @NewhamRecorder, or leave a comment below.